CG Power and Industrial Solutions, a Murugappa group company, is actively pursuing opportunities in contract manufacturing for Indian and global projects to grow its railway business. It is looking to participate in large railway projects like Vande Bharat through consortium and JVs with other technology players.
In an earnings call, the management of the company said it has been working supply towards tie-ups for projects like Vande Bharat and others. “Our endeavour for forging a partnership with a technology partner for any future tenders would be continuing,” the company said.
In its recent corporate presentation, CG Power said talks are on with potential partners for contract manufacturing for Indian and global projects, as the market has entry barriers like limited competition opportunities for MNCs that are not based in India.
Efforts are on to enter the package propulsion business to deliver initial orders, upgrade the tech and engineering skills in-house, and enhance portfolios like control panels. On the signalling front, the company plans to add products through tech tie-ups, it said.
The company has three manufacturing plants for the railway business, two in Bhopal and one in Pithampur. It produces rolling stock products like traction machines, railway transportation and traction electronics, apart from signalling products.
FY22, the company’s first full year of operation under the new management, saw railway business sales growing 160%. Order intake during the nine months of FY23 was at `447 crore (45% growth y-o-y). Unexecuted order book as on December 31, 2022, stood at `942 crore (29% growth).
CG Power suffered losses during 2017-2019 and became a non-performing asset.
Murugappa group’s Tube Investments of India (TII) acquired a majority equity stake and took control of the company with effect from November 26, 2020.
TII infused capital of `800 crore, made a one-time settlement of all secured creditors and guarantee obligations, paid all operational creditors, and infused working capital to revive operations. TII now holds 58.05% of the company.